Understanding Poverty: Definition, Causes, and Measurement

Poverty is a multidimensional socioeconomic condition in which individuals, families, or communities lack the resources needed to meet a minimum standard of living. Beyond low income, it can include limited access to housing, clean water, food, healthcare, education, and other essentials that enable a flourishing life.

Key takeaways

• Poverty is more than insufficient income; social factors such as race, gender, sexual identity, and education access shape who experiences it.
• In the U.S., tens of millions live below official poverty thresholds that vary by household size and composition.
• Globally, hundreds of millions remain in extreme poverty (less than about $2.15 per day).
• Childhood poverty has long-term consequences for health, education, and lifetime opportunity.
• Reducing poverty requires coordinated policies addressing income supports, education, health, infrastructure, and systemic discrimination.

How poverty affects people and societies

At the individual and household level, poverty limits the ability to obtain food, shelter, medical care, and other basic needs. Consequences include:
* Poor physical and mental health, higher child mortality, and developmental delays.
* Disruption of education through illness, instability, or lack of resources.
* Greater risk of homelessness, food insecurity, and exposure to environmental hazards.

At the societal level, high poverty rates are associated with slower economic growth, higher crime, weakened social cohesion, and greater strains on public services.

Dimensions of poverty

In the United States

U.S. poverty status is determined by income thresholds set for different household sizes and compositions. Government measures typically use pretax cash income and exclude certain populations (for example, institutionalized people, residents of military barracks, and some student populations). Poverty thresholds inform eligibility for many social programs.

Examples of thresholds:
* A four-person family with two children: income below roughly $30,000 per year (varies by year and methodology).
* Two people over 65 with no children: a lower threshold.

Global context

International poverty lines (commonly around $2.15 per day) enable comparisons across countries. Despite progress since the Industrial Revolution, hundreds of millions remain in extreme poverty. Global shocks—such as pandemics, conflicts, and climate impacts—can push additional millions below subsistence levels.

How poverty affects children

Children in poverty face:
* Higher rates of low birth weight and infant mortality in low-income settings.
* Greater incidence of chronic health problems, hearing and vision issues, and developmental challenges.
* More school absences, lower educational attainment, and greater stress at home.
These harms can compound across a lifetime, perpetuating intergenerational poverty.

Root causes of poverty

Poverty arises from a mix of structural and individual factors, including:
* Limited job growth and unemployment
* Weak infrastructure and poor access to markets or services
* Conflict, displacement, and political instability
* High cost of living and inflation
* Natural disasters and climate change
* Lack of social safety nets and inadequate public services
* Health crises, addiction, and untreated mental illness

Economic shocks and food insecurity can quickly reverse gains made by households, making progress fragile.

The role of discrimination

Systemic and social discrimination—based on race, ethnicity, gender, sexual orientation, health status, or other characteristics—can restrict access to education, employment, housing, credit, and public services. This exclusion increases the likelihood of poverty for affected groups. Examples include:
* Racial and ethnic minorities facing structural barriers in labor and housing markets.
* Women and single mothers experiencing pay gaps and caregiving burdens.
* LGBTQ+ people, especially those who are also racial/ethnic minorities, experiencing higher poverty rates in many contexts.

Measuring poverty

Common measurement approaches:
* Income-based thresholds: Define a poverty line (absolute or relative) and classify households below it as poor. Many countries update thresholds for inflation and household composition.
* International lines: Use a global daily income benchmark (e.g., ~$2.15/day) to track extreme poverty across countries.
* Multidimensional measures: Combine indicators such as education, health, and living standards to capture non-income aspects of deprivation.

Each method has limitations: income surveys may omit certain populations or noncash benefits, and single thresholds can miss important variations in needs or costs of living.

Strategies to reduce poverty

Effective anti-poverty strategies combine immediate relief with long-term investments:
Short-term and basic services
* Cash transfers and social safety nets
* Access to clean water, sanitation, nutrition, and primary healthcare
* Emergency shelter and food assistance

Long-term and structural measures
* Quality education and vocational training
* Job creation, inclusive economic growth, and living wages
* Affordable housing and reliable infrastructure (electricity, transport)
* Universal health coverage and paid leave policies
* Anti-discrimination laws and targeted supports for marginalized groups
* Climate resilience and disaster risk reduction for vulnerable communities

Global institutions, governments, NGOs, and the private sector must coordinate to scale proven interventions. Targets such as reducing extreme poverty require sustained investment and resilience-building to protect gains from shocks.

Snapshot: High-poverty regions and jurisdictions

• Some countries with the highest reported poverty rates include states affected by conflict, weak institutions, or chronic underdevelopment.
• Within the U.S., poverty rates vary by state and locality; some states and the District of Columbia report higher rates tied to regional economic conditions and policy choices.

Can poverty be solved?

Poverty can be greatly reduced and its worst effects mitigated through comprehensive policies that combine immediate support with investments in education, health, infrastructure, and inclusive economic opportunity. However, eliminating poverty entirely is complex and requires sustained political will, resources, and efforts to address systemic discrimination and vulnerability to shocks.

Conclusion

Poverty is a complex, multidimensional problem that undermines individual wellbeing and social progress. Measuring poverty accurately and addressing its root causes—economic, social, and political—are both essential. Progress depends on coordinated policies that provide immediate relief, expand opportunity, and protect vulnerable populations from setbacks.

Sources (selected)

U.S. Census Bureau; U.S. Department of Health and Human Services; World Bank; UNICEF; academic research on poverty and public health; UCLA Williams Institute.